CREW: Education Scandal Deepens; Inspector General Must Investigate

April 19, 2011 02:46 PM Eastern Daylight Time

WASHINGTON--(BUSINESS WIRE)--Why did a top official at the Department of Education continue to
receive federal benefits after he left his federal job? Today, Citizens
for Responsibility and Ethics in Washington (CREW) sent a letter to
Department of Education (DOE) Inspector General Kathleen S. Tighe asking
for an investigation into the department’s consultant agreement with
former Deputy Undersecretary Robert Shireman. Mr. Shireman left his
government job in June of 2010, but was immediately hired as a paid
intermittent consultant to Education’s Office of Federal Student Aid.

Despite this change in employment status, newly released documents show
Education officials agreed Mr. Shireman could continue to receive
federal benefits, including health care, paid leave, and retirement
benefits. Education’s personnel manual specifically prohibits
intermittent consultants from receiving such benefits. Education
redacted the identities of the officials who signed off on the agreement.

“Mr. Shireman got one heck of a deal: benefits available to federal
employees without the bother of a full-time job,” said CREW Executive
Director Melanie Sloan. “Given his role in the growing scandal that
shows the cozy relationship between DOE officials and Wall Street
short-sellers, the inspector general needs to take a look at this
arrangement and find out who agreed to it and why.”

During his time as Deputy Undersecretary, Mr. Shireman headed the effort
to more stringently regulate for-profit education companies. An
investigation by CREW has uncovered records that show extensive contact
between DOE officials and Wall Street investors. Particularly troubling
were the many emails that revealed short-sellers were influencing
proposed regulations in a way that stood to drive down the stock price
of for-profit colleges and allow investors to reap huge profits. Based
on these documents, CREW asked the Securities and Exchange Commission to
investigate possible market manipulation and twice asked
Education Secretary Arne Duncan to examine the improper influence on
Education’s regulatory process.

Citizens for Responsibility and Ethics in Washington (CREW) is a
non-profit legal watchdog group dedicated to holding public officials
accountable for their actions. For more information, please visit www.citizensforethics.org
or contact Garrett Russo at 202.408.5565 or grusso@citizensforethics.org.